Globalization Movement Gets Debt Win

By Mark Engler

Thanks in large part to persistent campaigners in the global South
and their international supporters, a plan granting 100% multilateral
debt relief for 18 impoverished countries has been approved by
leaders of the Group of Eight industrialized countries in advance of
their July meeting in Scotland.

When George W. Bush stood with Tony Blair at the White House
recently and argued that "highly indebted developing countries that
are on the path to reform should not be burdened by mountains of
debt," he may have been the first American president to endorse full
debt cancellation for some of Africa's poorest countries. But he
merely echoed what debt relief activists in the globalization
movement have been saying for a decade.

Observers have often remarked in recent years that globalization
demonstrators have won the moral argument about trade and
development, yet have not been able to translate their positions into
policy. The debt victory, however, provides a clear instance in which
allied activists from Africa, Europe, the US and beyond have affected
governmental decision-making and opened real possibilities for human
development.

For years, demonstrators promoting debt relief were dismissed or
derided. In the early '90s, citizens of the developing world
condemned an emerging situation in which some impoverished countries,
especially in sub-Saharan Africa, paid more in debt service to
wealthy nations than they were receiving from them in aid. Still, the
issue had little traction in affluent countries. "There was almost
zero awareness" of the debt issue in the US at the time, says Neil
Watkins, National Coordinator of Jubilee USA, the leading coalition
of debt relief advocates.

Social movement efforts changed that. In 1998 and 1999, global
activists, who had united in the international Jubilee debt campaign,
mobilized protests of more than 50,000 supporters at the respective
G8 summits in Birmingham, England, and Cologne, Germany. They also
gained the support of religious leaders such as the late Pope John
Paul II, who held up debt relief as "a precondition for the poorest
countries to make progress in their fight against poverty."

By this time policy-makers and pundits could no longer ignore the
call for debt cancellation. Some went on the attack. Following the
Birmingham demonstrations Andreas Whittam Smith, a columnist from the
London daily Independent, echoed much of elite opinion by calling the
Jubilee campaign's goals "laudable," but criticizing its political
strategy as "badly conceived." He charged that the coalition's
political action would "be ineffectual ... if not
counter-productive."

In fact, as grassroots efforts to highlight the issue grew,
wealthy countries responded at each stage by grudgingly expanding
their limited proposals for debt relief. While never satisfactory,
the previous G8-endorsed plan -- the Heavily Indebted Poor
Countries initiative, or HIPC -- nevertheless began establishing a
track record for what cancellation could accomplish.

Conservative critics have regularly charged that money from debt
cancellation would be mismanaged and would not be used to reduce
poverty. HIPC demonstrated that cancellation could actually be a most
effective form of foreign aid, allowing developing countries to
retain and use their own resources. By 2004, HIPC had advanced some
measure of relief to 27 countries, including Tanzania, Uganda and
Mozambique. A report from the World Bank that year showed that
together these countries nearly doubled their total spending on
poverty reduction -- including education, healthcare, and clean
water -- in the period from 1999 to 2004.

A final turning point in the debate came in the aftermath of the
invasion of Iraq, when the Bush administration appealed to creditor
nations to forgive tens of billions of dollars worth of Iraq's
foreign debt. With long-time advocates of cancellation unexpectedly
hearing the leader of the world's largest economic power contend that
unfair debt endangered a poor nation's "long-term prospects for
political health and economic prosperity," the moral debate was
effectively closed. All that remained was for policy to catch up.

While the G8 agreement, involving more than $40 billion of debt,
sets a landmark precedent, Jubilee campaigners will have much work
ahead of them making sure that 100% cancellation is granted to other
poor countries in need, as well as to nations who hold "odious" debts
accumulated by past dictators, and that cancellation comes without
strings attached. Yet the challenges that remain should not obscure a
major milestone -- one 10 years and dozens of protests in the
making.

Mark Engler, a writer based in New York City, is an analyst
with Foreign Policy In Focus (fpif.org). He can be reached via the
web site www.democracyuprising.com. Research assistance for this
article provided by Jason Rowe.